Naming and shaming is a serious sanction

FSA spokesman

Stock market listing rules required that the trade slumps, identifiable in mid-December 2000 and after a poor Christmas trading season that year, should have been revealed to investors "without delay".

The company also failed integrity guidelines by giving a misleading market briefing, even when aware that trade had "deteriorated significantly".

The frozen food firm said in a 13 December 2000 announcement: "Iceland's management remain positive on the group's future prospects."

Yet internal Iceland data at the time "indicated that actual profits were 51.1% below budget", an FSA spokesman told BBC News Online:

"If a private investor had bought Iceland shares on 14 December, they would not have had full information," the spokesman added.

At the end of January 2001, when Iceland issued a profits warning. "This is a serious breach of our rules," the spokesman said.

Separate probe

The FSA's findings follows continued questions surrounding Iceland during the retailer's last weeks under the leadership of founder Malcolm Walker.

Department of Trade and Industry investigators are probing the sale by Mr Walker of Iceland shares a few weeks before the release of the January 2001 warning, and his resignation the same day.

Big Food Group, which still owns the Iceland stores, on Friday distanced itself from its former chairman.

"A new and strong management team is in place, having implemented improved controls and reporting procedures within the group, and is now focussing on the recovery of the business," chairman George Greener said.

'Serious sanction'

The FSA said that, following Friday's announcement, it had no ongoing investigations concerning Big Food.

The authority also said that, while Big Food had escaped without financial penalty, "naming and shaming is a serious sanction".

While the FSA can impose unlimited fines for breaches of listing regulations, the powers only apply to transgressions committed after December 2001.